Laos Issues Decree on Business License Conditions for Foreign Investment

The Government has issued a decree detailing the Law on Commerce and the Law on Foreign Trade Management regarding goods trading and related activities by foreign investors and foreign-invested economic organisations. Decree No. 342/2026/ND-CP also sets out conditions for the issuance of business licences. Regarding goods trading of foreign-invested economic organisations, it stipulates that for goods subject to export licensing or conditions, the organisations must obtain the relevant licence or fully meet the legally prescribed requirements. On the issuance of business licences, the decree gives a detail list of activities for which business licences may be issued to foreign-invested economic organisations, including managing and operating intermediary e-commerce platforms, social networks engaged in e-commerce and integrated e-commerce platforms. Over conditions, criteria and grounds for issuance of business licences, the decree says that foreign investors from countries or territories that are parties to international treaties with Vietnam containing market-opening commitments for goods trading and directly related activities must satisfy the market access conditions under the relevant international treaty, which the investor chooses to apply in accordance with investment law, and continue to meet them throughout their business operations in Vietnam under the decree. Where an economic organisation has been established in Vietnam for at least one year as of the date of application submission, the investor must have no overdue tax debts. Foreign investors from countries or territories that are not parties to international treaties with Vietnam must meet the above-mentioned regulations and comply with relevant specialised laws and compatibility with the competitiveness of domestic enterprises operating in the same field during the one year preceding the date of application submission. It also details regulations for investors in services that are not covered by market-opening commitments under international treaties to which Vietnam is a party, and not covered by market-opening commitments, including petroleum-based lubricating oils and greases, rice, sugar, recorded products, books, newspapers and magazines. Regarding business licensing authority, the decree stipulates that the provincial-level People’s Committee where the foreign-invested economic organisation is headquartered is responsible for issuing, reissuing, adjusting and revoking business licences. The licensing authority shall seek opinions from the Ministry of Public Security and the Ministry of National Defence on national security matters in a number of specific cases. This decree aims to enhance transparency and clarify legal regulations for foreign investment in Laos, which is crucial for economic development. While the one-party system encourages foreign investment for growth, there's also a move to strengthen regulations to safeguard national security and domestic industries. For Laos, with its deep economic ties with neighbors like China and Vietnam, these provisions are a significant part of its external economic policy.